Contents

Future Developments ............ 1

What’s New .................. 1

Reminder .................... 2

Introduction .................. 2

NOL Steps ................... 2

How To Figure an NOL ........... 2

Worksheet 1. Figuring Your NOL .... 4

When To Use an NOL ............ 3

Waiving the Carryback Period ..... 5

How To Carry an NOL Back or 

Forward ................ 5

How To Claim an NOL Deduction ..... 5

Deducting a Carryback ......... 5

Deducting a Carryforward ........ 6

Change in Marital Status ........ 6

Change in Filing Status ......... 6

How To Figure an NOL Carryover ..... 7

NOL Carryover From 2021 to 2022 .... 7

Worksheet 2 Instructions ........ 7

Excess Business Loss ........... 7

How To Get Tax Help ............ 9

Index ..................... 12

Future Developments

For the latest information about developments 

related to Pub. 536, such as legislation enacted 

after it was published, go to IRS.gov/Pub536.

Section references are to the Internal 

Revenue Code unless otherwise noted.

What’s New

NOL carryback eliminated. .The special rules 

in section 172 permitting 5-year carrybacks for 

2018, 2019, and 2020 net operating losses 

(NOLs) added by the Coronavirus Aid, Relief, 

and Economic Security Act (CARES Act) of 

2020 have expired. Generally, you can only 

carry NOLs arising in tax years ending after 

2020 to a later year. An exception applies to 

certain farming losses, which may be carried 

back 2 years. See section 172(b) and Pub. 225, 

Farmer's Tax Guide. The COVID-related Tax 

Relief Act of 2020 amended the CARES Act, 

permitting taxpayers to elect to disregard the 

CARES Act provisions for farming loss NOLs. 

For more information, see Rev. Proc. 2021-14, 

I.R.B. 2021-30, at IRS.gov/irb/

2021-30_IRB#REV-PROC-2021-14.

NOL deduction limitation. In general, the 

NOL deduction for tax years beginning after December 31, 2020, cannot exceed the sum of the 

NOLs carried to the year from tax years beginning before January 1, 2018, plus the lesser of 

(i) the NOLs carried to the year from tax years 

beginning after December 31, 2017, or (ii) 80% 

Department 

of the 

Treasury

Internal 

Revenue 

Service

Publication 536

Cat. No. 46569U

Net Operating 

Losses (NOLs) 

for

Individuals, 

Estates, and 

Trusts

For use in preparing

2021 Returns

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Feb 28, 2022
of the excess (if any) of taxable income computed without regard to deductions for NOLs, 

Qualified Business Income (QBI), and section 

250 over the total NOL deduction from carryforward amounts from NOLs arising in tax years 

ending before January 1, 2018.

Annual losses limited. The Tax Cuts and 

Jobs Act (TCJA), section 11012, as amended 

by the CARES Act, section 2304, revised section 461(l) to limit the amount of losses from the 

trades or businesses of noncorporate taxpayers 

that the taxpayer can claim each year, beginning after 2020 and ending before 2026. You 

can't deduct net losses in excess of a threshold 

amount in the current year. The amount of the 

excess business loss is treated as an NOL for 

the current year for purposes of determining 

any NOL carryover for later tax years. Use Form 

461 to figure the excess business loss. Also see 

Worksheet 3, later.

Special rules for NOLs for 2018, 2019, and 

2020 expired. The special rule in the CARES 

Act that amended section 172(b)(1) to allow a 

5-year carryback of NOLs incurred in 2018, 

2019, and 2020 has expired. Thus, most taxpayers can only carry over NOLs incurred in tax 

years beginning after 2020. See section 172(b).

However, taxpayers with farming losses 

were allowed to elect out of the special 5-year 

NOL carryback tax treatment for 2018, 2019, 

and 2020. The election is made by the due date 

(including extensions) for filing your income tax 

return for the first tax year ending after December 27, 2020. If you had previously filed an income tax return before December 27, 2020, for 

tax years 2018, 2019, and 2020, and disregarded the CARES Act provisions, you’ll be treated 

as having made this election.

However, you are not treated as electing out 

of the NOL carryback treatment if you amended 

your return to take into account the CARES Act 

provisions by the due date (including extensions) for filing your tax return for the first tax 

year ending after December 27, 2020. See Rev. 

Proc 2021-14, at https://www.irs.gov/irb/

2021-30_IRB#REV-PROC-2021-14.

Carrying back an NOL to an earlier tax 

year may create an alternative minimum tax (AMT) liability for that earlier 

year. This may be true even if there was no 

AMT liability on the tax return filed for that earlier year.

Reminder

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a proud partner with the National Center for 

Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the 

Center may appear in this publication on pages 

that would otherwise be blank. You can help 

bring these children home by looking at the 

photographs and calling 1-800-THE-LOST 

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Introduction

If your deductions for the year are more than 

your income for the year, you may have a net 

operating loss (NOL). An NOL year is the year 

in which an NOL occurs. You can use an NOL 

by deducting it from your income in another 

year or years.

CAUTION

!

What this publication covers. This publication discusses NOLs for individuals, estates, 

and trusts. It covers:

• How to figure an NOL,

• When to use an NOL,

• How to claim an NOL deduction,

• How to figure an excess business loss, 

and

• How to figure an NOL carryover.

To have an NOL, your loss must generally 

be caused by deductions from your:

• Trade or business,

• Work as an employee (although not deductible for most taxpayers for 2018 

through 2025),

• Casualty and theft losses resulting from a 

federally declared disaster,

• Moving expenses (although not deductible 

for most taxpayers for 2018 through 2025), 

or

• Rental property.

A loss from operating a business is the most 

common reason for an NOL.

Partnerships and S corporations generally 

cannot use an NOL. However, partners or 

shareholders can use their separate shares of 

the partnership's or S corporation's business income and business deductions to figure their individual NOLs.

Keeping records. You should keep records 

for any tax year that generates an NOL for 3 

years after you have used the carryback/carryforward or 3 years after the carryforward expires.

You should attach all required documents to the Form 1045 or Form 

1040-X. For details, see the instructions 

for Form 1045 or Form 1040-X.

What is not covered in this publication? 

The following topics are not covered in this publication.

• Bankruptcies. See Pub. 908, Bankruptcy 

Tax Guide.

• NOLs of corporations. See Pub. 542, Corporations.

Comments and suggestions. We welcome 

your comments about this publication and suggestions for future editions.

You can send us comments through 

IRS.gov/FormComments. Or, you can write to 

the Internal Revenue Service, Tax Forms and 

Publications, 1111 Constitution Ave. NW, 

IR-6526, Washington, DC 20224.

Although we can’t respond individually to 

each comment received, we do appreciate your 

feedback and will consider your comments and 

suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. 

If you have a tax question not answered by this 

publication or the How To Get Tax Help section 

at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the 

search feature or viewing the categories listed.

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Useful Items

You may want to see:

Form (and Instructions)

Amended U.S. Individual Income 

Tax Return

Application for Tentative Refund

Limitation on Business Losses

NOL Steps

Follow Steps 1 through 5 to figure and use your 

NOL.

Step 1. Complete your tax return for the year. 

You may have an NOL if a negative amount appears in these cases.

• Individuals—You subtract your standard 

deduction or itemized deductions from 

your adjusted gross income (AGI).

• Estates and trusts—You combine taxable 

income, charitable deductions, income distribution deduction, and exemption 

amounts from your Form 1041.

Step 2. Determine whether you have an NOL 

and its amount. See How To Figure an NOL, 

later. If you do not have an NOL, stop here.

Step 3. If applicable, decide whether to carry 

the NOL back to a past year, or to waive the 

carryback period and instead carry the NOL forward to a future year. See When To Use an 

NOL, later.

Step 4. Deduct the NOL in the carryback or 

carryforward year. See How To Claim an NOL 

Deduction, later.

Step 5. Determine the amount of your unused 

NOL. See How To Figure an NOL Carryover, 

later. Carry the unused NOL to the next carryback or carryforward year and begin again at 

Step 4.

Note. If your NOL deduction includes more 

than one NOL amount, apply Step 5 separately 

to each NOL amount, starting with the amount 

from the earliest year.

How To Figure an NOL

If your deductions for the year are more than 

your income for the year, you may have an 

NOL.

There are rules that limit what you can deduct when figuring an NOL. In general, the following items are not allowed when figuring an 

NOL.

• Capital losses in excess of capital gains.

 1040-X

 1045

 461

Page 2 Publication 536 (2021)
• The section 1202 exclusion of the gain 

from the sale or exchange of qualified 

small business stock.

• Nonbusiness deductions in excess of nonbusiness income.

• The NOL deduction.

• The section 199A deduction for qualified 

business income.

Worksheet 1. Figuring Your NOL. Use Worksheet 1 to figure your NOL. The following discussion explains Worksheet 1. See the Instructions for Form 1045. If line 1 is a negative 

amount, you may have an NOL.

Nonbusiness capital losses (line 2). Don’t 

include on this line any section 1202 exclusion 

amounts (even if entered as a loss on Schedule D (Form 1041)).

Nonbusiness deductions (line 6). Enter as a 

positive number on line 6 deductions that are 

not connected to your trade or business or your 

employment. Examples of deductions not related to your trade or business are:

• Alimony paid,

• Deductions for contributions to an individual retirement account (IRA) or a self-employed retirement plan,

• Health savings account deduction,

• Archer medical savings account deduction,

• Most itemized deductions (except for 

casualty and theft losses resulting from a 

federally declared disaster and state income tax on trade or business income),

• The standard deduction, and

• Charitable contributions if you take the 

standard deduction.

Do not enter business deductions on line 6. 

These are deductions that are connected to 

your trade or business. They include the following.

• State income tax on income from your 

trade or business (including wages, salary, 

and unemployment compensation).

• Moving expenses for members of the 

Armed Forces on active duty (see Pub. 

521).

• Educator expenses.

• The deduction for the deductible part of 

self-employed health insurance and the 

deduction for the deductible part of 

self-employment tax.

• Rental losses.

• Loss on the sale or exchange of business 

real estate or depreciable property.

• Your share of a business loss from a partnership or an S corporation.

• Ordinary loss on the sale or exchange of 

section 1244 (small business) stock.

• Ordinary loss on the sale or exchange of 

stock in a small business corporation or a 

small business investment company.

• If you itemize your deductions, casualty 

and theft losses resulting from a federally 

declared disaster (even if they involve nonbusiness property).

• Loss on the sale of accounts receivable (if 

you use an accrual method of accounting).

• Interest and litigation expenses on state 

and federal income taxes related to your 

business.

• Unrecovered investment in a pension or 

annuity claimed on a decedent's final return.

• Payment by a federal employee to buy 

back sick leave used in an earlier year.

Nonbusiness income (line 7). Enter on line 7 

only income that is not related to your trade or 

business or your employment. This includes the 

following.

• Your taxable IRA distributions.

• Pension benefits.

• Social security benefits.

• Annuity income.

• Dividends.

• Interest on investments.

• Your share of nonbusiness income from a 

partnership or an S corporation.

Do not include on line 7 the income you receive from your trade or business or your employment. This includes the following.

• Salaries and wages.

• Self-employment income.

• Unemployment compensation.

• Rental income.

• Ordinary gain from the sale or other disposition of business real estate or depreciable business property.

• Your share of business income from a partnership or an S corporation.

Adjustment for section 1202 exclusion 

(line 17). Enter as a positive number on line 17 

any gain you excluded under section 1202 on 

the sale or exchange of qualified small business 

stock.

Adjustments for capital losses (lines 19–

22). The amount deductible for capital losses is 

limited based on whether the losses are business capital losses or nonbusiness capital losses.

You can deduct your nonbusiness capital 

losses (line 2) only up to the amount of your 

nonbusiness capital gains without regard to any 

section 1202 exclusion (line 3). If your nonbusiness capital losses are more than your nonbusiness capital gains without regard to any section 

1202 exclusion, you cannot deduct the excess.

You can deduct your business capital losses 

(line 11) only up to the total of:

• Your nonbusiness capital gains that are 

more than the total of your nonbusiness 

capital losses and excess nonbusiness deductions (line 10), and

• Your total business capital gains without 

regard to any section 1202 exclusion 

(line 12).

NOLs from other years (line 23). You cannot 

deduct any NOL carryovers or carrybacks from 

other years. Enter the total amount of your NOL 

deduction for losses from other years.

Worksheet 1. Figuring Your 

NOL Example

The following example describes how to figure 

an NOL.

Example. Glenn Johnson is in the retail record business. He is single and has the following income and deductions on his Form 1040 

for 2021.

INCOME

Wages from part-time job ............. $1,225

Interest on savings .................. 425

Net long-term capital gain on sale of real 

estate used in business ...............

2,000

Glenn's total income $3,650

DEDUCTIONS

Net loss from business (gross income of 

$67,000 minus expenses of $72,000) .... $5,000

Net short-term capital loss

on sale of stock .................... 1,000

Standard deduction ................. 12,550

Glenn's total deductions $18,550

Glenn's deductions exceed his income by 

$14,900 ($18,550 − $3,650). However, to figure 

whether he has an NOL, certain deductions are 

not allowed. He uses Worksheet 1 to figure his 

NOL.

The following items are not allowed on 

Worksheet 1.

Nonbusiness net short-term capital loss .... $1,000

Nonbusiness deductions

(standard deduction, $12,550) minus

nonbusiness income (interest, $425) .......

12,125

Total adjustments to net loss $13,125

Therefore, Glenn's NOL for 2021 is figured 

as follows.

Glenn's total 2021 income ............ $3,650

Less:

Glenn's original 2021 total 

deductions ............. $18,550

Reduced by the disallowed 

items ................

− 13,125 − 5,425

Glenn's NOL for 2021 ............... $1,775

When To Use an NOL

If you have an NOL for a tax year ending in 

2021, only the farming loss portion, if any, can 

be carried back.

NOL year. This is the year in which the NOL 

occurred.

Exception to the No Carryback Rule. Farming losses, defined next, qualify for a 2-year carryback period. Only the farming loss portion of 

an NOL can be carried back 2 years. The 80% 

limitation rule does not apply to a carryback period before 2021.

Farming business. A farming business is 

a trade or business involving cultivation of land 

or the raising or harvesting of any agricultural or 

horticultural commodity. A farming business 

can include operating a nursery or sod farm or 

raising or harvesting most ornamental trees or 

trees bearing fruit, nuts, or other crops. The 

raising, shearing, feeding, caring for, training, 

and management of animals is also considered 

a farming business.

A farming business does not include contract harvesting of an agricultural or horticultural 

commodity grown or raised by someone else. It 

also does not include a business in which you 

Publication 536 (2021) Page 3
Worksheet 1. Figuring Your NOL Keep for Your Records

1. For individuals, subtract your standard deduction or itemized deductions from your AGI and enter it 

here. For estates and trusts, enter taxable income increased by the total of the charitable deduction, 

income distribution deduction, and exemption amount ..................................... 1.

2. Nonbusiness capital losses before limitation. Enter as a positive 

number ....................................................... 2.

3. Nonbusiness capital gains (without regard to any section 1202 

exclusion) ..................................................... 3.

4. If line 2 is more than line 3, enter the difference. Otherwise, enter -0- ..... 4.

5. If line 3 is more than line 2, enter the difference. 

Otherwise, enter -0- ......................... 5.

6. Nonbusiness deductions (see Nonbusiness deductions under How To 

Figure an NOL, later). Enter as a positive number ..................... 6.

7. Nonbusiness income other than capital gains (see 

Nonbusiness income under How To Figure an 

NOL, later) ................................ 7.

8. Add lines 5 and 7 ............................................... 8.

9. If line 6 is more than line 8, enter the difference. Otherwise, enter -0- ......................... 9.

10. If line 8 is more than line 6, enter the difference. 

Otherwise, enter -0-. But don’t enter more than 

line 5 ..................................... 10.

11. Business capital losses before limitation. Enter as a positive 

number ....................................................... 11.

12. Business capital gains (without regard to any 

section 1202 exclusion) ...................... 12.

13. Add lines 10 and 12 ............................................. 13.

14. Subtract line 13 from line 11. If zero or less, enter -0- .................. 14.

15. Add lines 4 and 14 .............................................. 15.

16. Enter the loss, if any, from line 16 of your 2021 Schedule D (Form 1040). 

Estates and trusts, enter the loss, if any, from line 19, column (3), of 

Schedule D (Form 1041). Enter as a positive number. If you don’t have a 

loss on that line (and don’t have a section 1202 exclusion), skip lines 16 

through 21 and enter on line 22 the amount from line 15 ............... 16.

17. Section 1202 exclusion. Enter as a positive number ........................................ 17.

18. Subtract line 17 from line 16. If zero or less, enter -0- .................. 18.

19. Enter the loss, if any, from line 21 of your 2021 Schedule D (Form 1040). 

Estates and trusts, enter the loss, if any, from line 20 of Schedule D (Form 

1041). Enter as a positive number. ................................. 19.

20. If line 18 is more than line 19, enter the difference. Otherwise, 

enter -0- ....................................................... 20.

21. If line 19 is more than line 18, enter the difference. Otherwise, enter -0- ........................ 21.

22. Subtract line 20 from line 15. If zero or less, enter -0- ....................................... 22.

23. NOL deduction for losses from other years. Enter as a positive number ........................ 23.

24. NOL. Combine lines 1, 9, 17, and 21 through 23. If the result is less than zero, enter it here. 

If the result is zero or more, you don’t have an NOL .................................... 24.

Page 4 Publication 536 (2021)
merely buy or sell plants or animals grown or 

raised entirely by someone else.

Farming loss. A farming loss is the smaller of:

• The amount that would be the NOL for the 

tax year if only income and deductions 

from farming businesses (as defined in 

section 263A(e)(4)) were taken into account, or

• The NOL for the tax year.

Annual losses limited for 2021. Excess business losses for noncorporate taxpayers are 

limited for tax years 2021 through 2026. Generally, any disallowed loss is treated as an NOL 

carryover to later years. Also, excess business 

losses are now computed without regard to any 

deduction allowed under IRC section 172 or 

199A and without regard to any deductions, 

gross income, or gains attributable to any trade 

or business of performing services as an employee. You can’t deduct net losses in excess 

of a threshold amount in the current year.

For 2021, excess means total (modified) 

business deductions over the sum of total gross 

business income plus $262,000 ($524,000 for 

joint returns). The excess is treated as an NOL 

to be carried forward (or carried back for farmer’s excess business losses). Further, when 

carryforwards can be used, they can only offset 

80% of taxable income in future years. While 

the limitation for excess business loss applies 

to calculate the amount to deduct as an NOL in 

the loss year, the deduction is not limited to 

80% of modified adjusted gross income in the 

previous (carryback) year(s). So the full amount 

of modified adjusted gross income in previous 

years is used to absorb the loss. See Excess 

Business Loss, later.

Waiving the Carryback 

Period

You can choose not to carry back your farming 

NOL. If you make this choice, then you can 

carry your NOL forward indefinitely until it is fully 

absorbed.

To make this choice, attach a statement to 

your original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive 

the carryback period under section 172(b).

If you filed your original return on time but 

did not file the statement with it, you can make 

this choice on an amended return filed within 6 

months of the due date of the return (excluding 

extensions). Attach a statement to your amended return, and write “Filed pursuant to section 

301.9100-2” at the top of the statement.

Once you choose to waive the carryback period, it is generally irrevocable. The election 

must be made by the due date of the return, including extensions.

If you do not file this statement on time, 

you cannot waive the carryback period.

How To Carry an NOL Back 

or Forward

If you choose to carry back a farming loss, you 

must first carry the farming loss to the earliest 

year in the 2-year carryback period. If the 

CAUTION

!

farming loss is not used up, you can carry the 

rest to the next earliest carryback year, and 

then on to carryover years after the loss year, 

and so on.

If you waive the carryback period or do not 

use up all of the farming loss in the carryback 

period, you will have an NOL that can be carried forward indefinitely until used up. This NOL 

will be equal to the sum of what remains of the 

farming loss, plus any nonfarm NOL, plus any 

excess business loss for the NOL year. See Excess Business Loss, later. Start by carrying the 

NOL to the first tax year after the NOL year. If 

you do not use it up, carry the unused part to 

the next year. Continue to carry any unused 

part of the NOL forward until the NOL is used 

up.

For nonfarming businesses, since you can’t 

carry the NOL to an earlier year, your NOL deduction for the carryover year is equal to the 

sum of :

1. Any unused NOLs from tax years before 

2018; plus

2. The lesser of:

a. The NOL from tax years after 2017, 

which includes any part of the NOL attributable to an excess business loss; or

b. 80% of taxable income for the carryover 

year determined before any NOL deduction and without regard to sections 199A or 

250.

Only NOLs arising after 2017 and carried 

forward to a year after 2020 are subject to the 

80%-of-taxable-income limit. The total amount 

of any NOL deduction for 2021 or thereafter that 

is attributable to NOLs from tax years after 2017 

can’t exceed 80% of taxable income without regard to the NOL deduction or sections 199A or 

250.

Example. You started your farming business as a sole proprietor in 2021 and had a 

$42,000 NOL for the year. No part of this NOL 

is from another business activity. There are no 

NOL carryovers or carrybacks to 2019 and 

2020 other than the 2021 NOL.

Year

Carryback/

Carryover

Unused Loss

2019 ...... $42,000 $40,000

2020 ...... $40,000 $0

2021 (NOL 

year) ........

How To Claim

an NOL Deduction

If you have not already carried the NOL to an 

earlier year, your NOL deduction for the carryover year is equal to the sum of:

1. Any unused NOLs from tax years beginning before 2018; plus

2. The lesser of:

a. The NOL from the tax year beginning after 2017, which includes any part of the 

NOL attributable to an excess business 

loss; or

b. 80% of taxable income for the carryover 

year determined without regard to the NOL 

deduction or sections 199A or 250.

If you carried the NOL to an earlier year, 

your NOL deduction is the carried over NOL minus the NOL amount you used in the earlier 

year or years. If you carry more than one NOL 

to the same year, your NOL deduction is the total of these carrybacks and carryovers.

NOL resulting in no taxable income. If your 

NOL is more than the taxable income of the 

year you carry it to (figured before deducting the 

NOL), you will generally have an NOL carryover 

to the next year. See How To Figure an NOL 

Carryover, later, to determine how much NOL 

you have used and how much you carry to the 

next year.

Deducting a Carryback

If you carry back your NOL, you can use either 

Form 1045 or Form 1040-X. You can get your 

refund faster by using Form 1045, but you have 

a shorter time to file it. You can use Form 1045 

to apply an NOL to all carryback years. If you 

use Form 1040-X, you must use a separate 

Form 1040-X for each carryback year to which 

you apply the NOL.

Estates and trusts that do not file Form 1045 

must file an amended Form 1041 (instead of 

Form 1040-X) for each carryback year to which 

NOLs are applied. Use a copy of the appropriate year's Form 1041, check the “Net operating 

loss carryback” box, and follow the Form 1041 

instructions for amended returns. Include the 

NOL deduction with other deductions not subject to the 2% limit (line 15a). Also, see the special procedures for filing an amended return due 

to an NOL carryback, explained under Form 

1040-X, later.

Form 1045. You can apply for a quick refund 

by filing Form 1045. This form results in a tentative adjustment of tax in the carryback year.

If the IRS refunds or credits an amount to 

you from Form 1045 and later determines that 

the refund or credit is too much, the IRS may 

assess and collect the excess immediately.

Generally, you must file Form 1045 on or after the date you file your tax return for the NOL 

year, but not later than 1 year after the end of 

the NOL year. If the last day of the NOL year 

falls on a Saturday, Sunday, or holiday, the form 

will be considered timely filed if postmarked on 

the next business day. For example, if you are a 

calendar year taxpayer with a carryback from 

2021 to 2019, you must file Form 1045 on or after the date you file your tax return for 2021, but 

no later than December 31, 2022.

If you were affected by a federally declared disaster, you may have additional time to file your Form 1045. For 

more information, go to IRS.gov/

DisasterTaxRelief.

Form 1040-X. If you do not file Form 1045, you 

can file Form 1040-X to get a refund of tax because of an NOL carryback. Generally, file 

Form 1040-X for the carryback year within 3 

years after the due date, including extensions, 

for filing the return for the NOL year. For example, if you are a calendar year taxpayer, you 

must generally file a claim for refund because of 

CAUTION

!

Publication 536 (2021) Page 5
an NOL carryback from 2019 by April 15, 2023 

(3 years after the due date for the NOL return).

Filing Form 1040-X does not extend 

the carryback period. See When To 

Use an NOL, earlier.

Attach a computation of your NOL using 

Form 1045, Schedule A, and, if it applies, your 

NOL carryover using Form 1045, Schedule B, 

discussed later.

Refiguring your tax. To refigure your total tax 

liability for a carryback year, first refigure your 

AGI for that year. (On Form 1045, use lines 10 

and 11 and the “After carryback” column for the 

applicable carryback year.) Use your AGI after 

applying the NOL deduction to refigure income 

or deduction items that are based on, or limited 

to, a percentage of your AGI. Refigure the following items.

1. The special allowance for passive activity 

losses from rental real estate activities.

2. Taxable social security benefits.

3. IRA deductions.

4. Excludable savings bond interest.

5. Excludable employer-provided adoption 

benefits.

6. The student loan interest deduction.

7. The tuition and fees deduction.

If more than one of these items apply, refigure them in the order listed above, using your 

AGI after applying the NOL deduction and any 

previous item. (If you are using Form 1045, enter your NOL deduction on line 10. On line 11, 

using the “After carryback” column, enter your 

AGI refigured after applying the NOL deduction 

and after refiguring any above items.)

Next, refigure your taxable income. (On 

Form 1045, use lines 12 through 15 and the “After carryback” column.) Use your refigured AGI 

(Form 1045, line 11, using the “After carryback” 

column) to refigure certain deductions and 

other items that are based on or limited to a percentage of your AGI. Refigure the following 

items.

• The itemized deduction for medical expenses.

• The itemized deduction for qualified mortgage insurance premiums.

• The itemized deduction for casualty losses.

• Miscellaneous itemized deductions subject 

to the 2% limit.

• The overall limit on itemized deductions.

• The phaseout of the deduction for exemptions.

Note. For tax years after 2017, the TCJA 

eliminated the itemized deduction for miscellaneous itemized deductions subject to the 2% 

limit, the overall limit on itemized deductions, 

and the deduction for exemptions.

Do not refigure the itemized deduction 

for charitable contributions, even if you 

refigure your AGI. Also, since you do 

not decrease your charitable contributions, do 

not increase your charitable contributions carryover.

Finally, use your refigured taxable income 

(Form 1045, line 15, using the “After carryback” 

column) to refigure your total tax liability. 

CAUTION

!

CAUTION

!

Refigure your income tax, your alternative minimum tax, and any credits that are based on or 

limited by your AGI, modified AGI (MAGI), or 

tax liability. (On Form 1045, use lines 16 

through 30, and the “After carryback” column.) 

The earned income credit, for example, may be 

affected by changes to AGI or the amount of tax 

(or both) and, therefore, must be refigured. If 

you become eligible for a credit because of the 

carryback, complete the form for that specific 

credit (such as the EIC Worksheet) for that 

year.

While it is necessary to refigure your income 

tax, alternative minimum tax, and credits, do not 

refigure your self-employment tax and Additional Medicare Tax. For information about refiguring your net investment income tax, shared 

responsibility payment, and credits, see the Instructions for Form 1045.

Deducting a Carryforward

If you carry forward your NOL to a tax year after 

the NOL year, list your NOL deduction as a 

negative figure on the “Other income” line of 

Schedule 1 (Form 1040) or Form 1040-NR 

(line 8 for 2021). Estates and trusts, include an 

NOL deduction on Form 1041, line 15b, for 

2021.

You must attach a statement that shows all 

the important facts about the NOL. Your statement should include a computation showing 

how you figured the NOL deduction. If you deduct more than one NOL in the same year, your 

statement must cover each of them.

Change in Marital Status

If you and your spouse were not married to 

each other in all years involved in figuring NOL 

carrybacks and carryovers, only the spouse 

who had the loss can take the NOL deduction. If 

you file a joint return, the NOL deduction is limited to the income of that spouse.

For example, if your marital status changes 

because of death or divorce, and in a later year 

you have an NOL, you can carry back that loss 

only to the part of the income reported on the 

joint return (filed with your former spouse) that 

was related to your taxable income. After you 

deduct the NOL in the carryback year, the joint 

rates apply to the resulting taxable income.

Refund limit. If you are not married in the 

NOL year (or are married to a different spouse), 

and in the carryback year you were married and 

filed a joint return, your refund for the overpaid 

joint tax may be limited. You can claim a refund 

for the difference between your share of the refigured tax and your contribution toward the tax 

paid on the joint return. The refund cannot be 

more than the joint overpayment. Attach a 

statement showing how you figured your refund.

Figuring your share of a joint tax liability. There are five steps for figuring your share 

of the refigured joint tax liability.

1. Figure your total tax as though you had 

filed as married filing separately.

2. Figure your spouse's total tax as though 

your spouse also had filed as married filing 

separately.

3. Add the amounts in (1) and (2).

4. Divide the amount in (1) by the amount in 

(3).

5. Multiply the refigured tax on your joint return by the amount figured in (4). This is 

your share of the joint tax liability.

Figuring your contribution toward tax 

paid. Unless you have an agreement or clear 

evidence of each spouse's contributions toward 

the payment of the joint tax liability, figure your 

contribution by adding the tax withheld on your 

wages and your share of joint estimated tax 

payments or tax paid with the return. If the original return for the carryback year resulted in an 

overpayment, reduce your contribution by your 

share of the tax refund. Figure your share of a 

joint payment or refund by the same method 

used in figuring your share of the joint tax liability. Use your taxable income as originally reported on the joint return in steps 1 and 2 above, 

and substitute the joint payment or refund for 

the refigured joint tax in step 5.

Change in Filing Status

If you and your spouse were married and filed a 

joint return for each year involved in figuring 

NOL carrybacks and carryovers, figure the NOL 

deduction on a joint return as you would for an 

individual. However, treat the NOL deduction as 

a joint NOL.

If you and your spouse were married and 

filed separate returns for each year involved in 

figuring NOL carrybacks and carryovers, the 

spouse who sustained the loss may take the 

NOL deduction on a separate return.

Special rules apply for figuring the NOL carrybacks and carryovers of married people 

whose filing status changes for any tax year involved in figuring an NOL carryback or carryover.

Separate to joint return. If you and your 

spouse file a joint return for the tax year, and 

were married but filed separate returns for any 

of the tax years involved in figuring the NOL 

carryback or carryover, treat the separate carryback or carryover as a joint carryback or carryover.

Joint to separate returns. If you and your 

spouse file separate returns for a tax year, but 

filed a joint return for any or all of the tax years 

involved in figuring the NOL carryover, figure 

each of your carryovers separately, by separating the NOL portion for each spouse from within 

the joint return.

Because the joint NOL is being carried to a 

tax year involving separate returns, the separate NOL of each spouse must be figured.

Joint return in NOL year. Figure each 

spouse's share of the joint NOL through the following steps.

1. Figure each spouse's NOL as if he or she 

filed a separate return. See How To Figure 

an NOL, earlier. If only one spouse has an 

NOL, stop here. All of the joint NOL is that 

spouse's NOL.

2. If both spouses have an NOL, multiply the 

joint NOL by a fraction, the numerator of 

which is spouse A's NOL figured in (1) and 

the denominator of which is the total of the 

spouses' NOLs figured in (1). The result is 

Page 6 Publication 536 (2021)
spouse A's share of the joint NOL. The 

rest of the joint NOL is spouse B's share.

Example 1. Mark and Nancy are married 

and file a joint return for 2021. They have an 

NOL of $5,000 from a farming business. They 

carry the NOL back to 2019, a year in which 

Mark and Nancy filed separate returns. Figured 

separately, Nancy's 2021 deductions were 

more than her income, and Mark's income was 

more than his deductions. Mark does not have 

any NOL to carry back. Nancy can carry back 

the entire $5,000 NOL to her 2019 separate return.

Example 2. Assume the same facts as in 

Example 1, except that both Mark and Nancy 

had deductions in 2021 that were more than 

their income. Figured separately, his NOL is 

$1,800 and her NOL is $3,000. The sum of their 

separate NOLs ($4,800) is less than their 

$5,000 joint NOL because his deductions included a $200 net capital loss that is not allowed in 

figuring his separate NOL. The loss is allowed 

in figuring their joint NOL because it was offset 

by Nancy's capital gains. Mark's share of their 

$5,000 joint NOL is $1,875 ($5,000 × 

$1,800/$4,800) and Nancy's is $3,125 ($5,000 

− $1,875).

How To Figure an NOL 

Carryover

If your NOL is more than your taxable income 

for the year to which you carry it (figured before 

deducting the NOL), you may have an NOL carryover. You must make certain modifications to 

your taxable income to determine how much 

NOL you will use up in that year and how much 

you can carry over to the next tax year. Your 

carryover is the excess of your NOL deduction 

over your modified taxable income for the carryback or carryforward year. If your NOL deduction includes more than one NOL, apply the 

NOLs against your modified taxable income in 

the same order in which you incurred them, 

starting with the earliest.

Modified taxable income. Your modified taxable income is your taxable income figured with 

the following changes.

1. You cannot claim an NOL deduction for 

the NOL carryover you are figuring or for 

any later NOL.

2. You cannot claim a deduction for capital 

losses in excess of your capital gains. 

Also, you must increase your taxable income by the amount of any section 1202 

exclusion.

3. You cannot claim a deduction for your exemptions for yourself, your spouse, or your 

dependents.

4. You must figure any item affected by the 

amount of your AGI after making the 

changes in (1), (2), and (3) above, and 

certain other changes to your AGI that result from (1), (2), and (3). This includes income and deduction items used to figure 

AGI (for example, IRA deductions), as well 

as certain itemized deductions. To figure a 

charitable contribution deduction, do not 

include deductions for NOL carrybacks in 

the change in (1) but do include deductions for NOL carryforwards from tax years 

before the NOL year.

Your taxable income as modified cannot be 

less than zero.

Form 1045, Schedule B. You can use Form 

1045, Schedule B, to figure your modified taxable income for carryback years and your carryover from each of those years. If your 2021 return includes an NOL deduction from an NOL 

year before 2018 that reduced your taxable income to zero (to less than zero, if an estate or 

trust), see NOL Carryover From 2021 to 2022 

below.

NOL Carryover From 

2021 to 2022

If you had an NOL deduction carried forward 

from a year before 2018 that resulted in your 

having taxable income on your 2021 return of 

zero (or less than zero, if an estate or trust), 

complete Worksheet 2 on the next page. It will 

help you figure your NOL to carry to 2022. Keep 

the worksheet for your records.

For NOL year 2021, complete Worksheet 3 

to figure the carryover from 2021. Keep the 

worksheet for your records.

Worksheet 2 Instructions

Use Worksheet 2 to figure your carryover to 

2022 if you had an NOL deduction from a year 

before 2018 that resulted in your having taxable 

income on your 2021 return of zero or less. If 

your taxable income is still positive after application of the NOL deduction, there is no carryover to 2022.

At the top of the worksheet, enter the NOL 

year for which you are figuring the carryover.

More than one NOL. If your 2021 NOL deduction includes amounts for more than 1 loss year, 

complete this worksheet only for 1 loss year. To 

determine which year, start with your earliest 

NOL and subtract each NOL separately from 

your taxable income figured without the NOL 

deduction. Complete this worksheet for the earliest NOL that results in your having taxable income below zero. Your NOL carryover to 2022 

is the total of the amount on line 9 of the worksheet and all later NOL amounts.

Line 1. Enter as a positive number the NOL 

carryover from the NOL year identified.

Line 2. Enter your taxable income without the 

NOL deduction for the year listed at the top of 

Worksheet 2, but with the NOL deduction from 

any prior year.

Line 6. You must refigure the following income 

and deductions based on AGI.

1. The special allowance for passive activity 

losses from rental real estate activities.

2. Taxable social security benefits.

3. IRA deductions.

4. Excludable savings bond interest.

5. Excludable employer-provided adoption 

benefits.

6. The student loan interest deduction.

If none of these items apply to you, enter 

zero on line 6. Otherwise, increase your AGI by 

the total of lines 3 through 5 and your NOL deduction for the NOL year entered at the top of 

the worksheet and later years. Using this increased AGI, refigure the items that apply, in 

the order listed above. Your adjustment for 

each item is the difference between the refigured amount and the amount included on your 

return. Combine the adjustments for previous 

items with your AGI before refiguring the next 

item. Keep a record of your computations.

Enter your total adjustments for the above 

items on line 6.

Line 7. Enter zero if you claimed the standard 

deduction and the amounts on lines 3 through 5 

are zero. Otherwise, use lines 10 through 26 of 

the worksheet to figure the amount to enter on 

this line. Complete only those sections that apply to you.

Estates and trusts. Enter zero on line 7 if 

you did not claim a casualty or theft loss. Otherwise, refigure these deductions by substituting 

MAGI (see below) for AGI. Subtract the refigured deductions from those claimed on the return. Enter the result on line 7.

Modified adjusted gross income (MAGI). 

To refigure the casualty and theft loss deduction of an estate or trust, MAGI is the total of the 

following amounts.

• The AGI amount you used to figure the deduction claimed on the return.

• The amounts from lines 3 through 5 of the 

worksheet.

• The NOL deduction for the NOL year entered at the top of the worksheet and for 

later years.

Line 10. Treat your NOL deduction for the 

NOL year entered at the top of the worksheet 

and for later years as a positive amount. Add it 

to your AGI. Enter the result on line 10.

Lines 19 and 20. You may be entitled to a 

larger charitable contributions deduction in determining modified taxable income for 2021 

(line 19) than the charitable contribution deduction you were allowed in determining 2021 taxable income (line 18). Because of this, the 

amount you enter on line 20 may be negative. 

To the extent that these additional charitable 

contribution deductions decrease the amount of 

NOL that is used in 2021, you must reduce your 

charitable contribution carryover to 2022.

Excess Business Loss

Noncorporate taxpayers may be subject to excess business loss limitations. The at-risk limits 

and the passive activity limits are applied before 

figuring the amount of any excess business 

loss. An excess business loss is the amount by 

which the total deductions attributable to all of 

your trades or businesses exceed your total 

gross income and gains attributable to those 

trades or businesses plus $262,000 (or 

$524,000 in the case of a joint return). A trade 

or business includes, but is not limited to, 

Schedule C and Schedule F activities, and certain activities reported on Schedule E. (In the 

case of a partnership or S corporation, although 

Publication 536 (2021) Page 7
the limitation is applied at the partner or shareholder level, the trade or business determination is made at the entity’s level.) Business 

gains and losses reported on Schedule D and 

Form 4797 are included in the excess business 

loss calculation. Excess business losses that 

are disallowed are treated as an NOL carryover 

to the following tax year. See Form 461 and its 

instructions for details. For application of these 

rules to farmers, see also Pub. 225 and the Instructions for Schedule F (Form 1040 or 

1040-SR).

Example. For the year 2021, an individual unmarried taxpayer operates a Schedule C business and incurs a loss of $1 million. The taxpayer completes Form 461 and determines that 

he has incurred an excess business loss of 

$738,000. The taxpayer reports the excess 

business loss as a positive number on Schedule 1 (Form 1040 or 1040-SR), line 8–effectively 

offsetting part of the loss claimed on Schedule C. This excess business loss of $738,000 

will be treated as an NOL carryover to 2022. 

The taxpayer must then complete Worksheet 3 

below to figure the total NOL carryover from 

2021 to 2022.

Worksheet 3 Instructions

Use Worksheet 3 to figure your carryover to 

2022 if you had an NOL deduction in 2021.

Line 1. Enter your NOL amount from Worksheet 1, line 24.

Worksheet 2. Worksheet To Figure NOL Carryover From 2021 to 2022

(For an NOL Carryforward From a Year Before 2018 (When 2018 Through 2020 Are Intervening Years))

Caution. Don’t use this worksheet for NOL carryforwards from 2018, 2019, or 2020.

For Use by Individuals, Estates, and Trusts (Keep for your records.)

See the Worksheet 2 Instructions, earlier.

NOL Year __________

USE YOUR 2021 FORM 1040, 1040-SR, 1040-NR, OR 1041 TO COMPLETE THIS WORKSHEET:

1. Enter as a positive number your NOL deduction for the NOL year entered above from Schedule 1 (Form 

1040) or Form 1040-NR, line 8; or Form 1041, line 15b ................................... __________

2. Enter your taxable income without the NOL deduction for 2021. See instructions ................ __________

3. Enter as a positive number any net capital loss deduction ................................. __________

4. Enter as a positive number any gain excluded on the sale or exchange of qualified small business 

stock ........................................................................ __________

5. Enter as a positive number any qualified business income deduction ......................... __________

6. Enter any adjustments to your adjusted gross income. See instructions ....................... __________

7. Enter any adjustments to your itemized deductions from line 26 below. See instructions ........... __________

8. Modified taxable income. Combine lines 2 through 7. Enter the result (but not less than zero) ..... __________

9. NOL carryover to 2022. Subtract line 8 from line 1. Enter the result (but not less than zero) here and 

on the “Other income” line of Schedule 1 (Form 1040) or Form 1040-NR (or the line on Form 1041 for 

other deductions) in 2022 ......................................................... __________

ADJUSTMENTS TO ITEMIZED DEDUCTIONS (INDIVIDUALS ONLY):

10. Enter your adjusted gross income without the NOL deduction for the NOL year entered above or later 

years. See instructions ........................................................... __________

11. Combine lines 3 through 6 above ................................................... __________

12. Modified adjusted gross income. Combine lines 10 and 11 above ......................... __________

ADJUSTMENT TO MEDICAL EXPENSES:

13. Enter your medical expenses from Schedule A (Form 1040), line 4 .......................... __________

14. Enter your medical expenses from Schedule A (Form 1040), line 1 .......................... __________

15. Multiply line 12 above by 7.5% (0.075) ............................................... __________

16. Subtract line 15 from line 14. Enter the result (but not less than zero) ......................... __________

17. Subtract line 16 from line 13 ...................................................... __________

ADJUSTMENT TO CHARITABLE CONTRIBUTIONS:

18. Enter your charitable contributions deductions from Schedule A (Form 1040), line 14; or Schedule A 

(Form 1040-NR), line 5 .......................................................... __________

19. Refigure your charitable contributions deduction using line 12 above as your adjusted gross income. 

See instructions ................................................................ __________

20. Subtract line 19 from line 18 ....................................................... __________

ADJUSTMENT TO CASUALTY AND THEFT LOSSES:

21. Enter your casualty and theft losses from Form 4684, line 18 ............................... __________

22. Enter your casualty and theft losses from Form 4684, line 16 ............................... __________

23. Multiply line 12 above by 10% (0.10) ................................................ __________

24. Subtract line 23 from line 22. Enter the result (but not less than zero) ......................... __________

25. Subtract line 24 from line 21 ....................................................... __________

26. Combine lines 17, 20, and 25, and enter the result here and on line 8 ......................... __________

Page 8 Publication 536 (2021)
How To Get Tax Help

If you have questions about a tax issue, need 

help preparing your tax return, or want to download free publications, forms, or instructions, go 

to IRS.gov and find resources that can help you 

right away.

Preparing and filing your tax return. After 

receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 

1099-NEC, etc.); unemployment compensation 

statements (by mail or in a digital format) or 

other government payment statements (Form 

1099-G); and interest, dividend, and retirement 

statements from banks and investment firms 

(Forms 1099), you have several options to 

choose from to prepare and file your tax return. 

You can prepare the tax return yourself, see if 

you qualify for free tax preparation, or hire a tax 

professional to prepare your return.

For 2021, if you received an Economic 

Impact Payment, refer to your Notice 

1444-C, Your 2021 Economic Impact 

Payment. If you received Advance Child Tax 

Credit payments, refer to your Letter 6419, Total Advance Child Tax Credit (AdvCTC) Payments.

Free options for tax preparation. Go to 

IRS.gov to see your options for preparing and 

filing your return online or in your local community, if you qualify, which include the following.

• Free File. This program lets you prepare 

and file your federal individual income tax 

return for free using brand-name tax-preparation-and-filing software or Free File fillable forms. However, state tax preparation 

may not be available through Free File. Go 

to IRS.gov/FreeFile to see if you qualify for 

free online federal tax preparation, e-filing, 

and direct deposit or payment options.

• VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help 

to people with low-to-moderate incomes, 

persons with disabilities, and limited-English-speaking taxpayers who need help 

preparing their own tax returns. Go to 

IRS.gov/VITA, download the free IRS2Go 

app, or call 800-906-9887 for information 

on free tax return preparation.

• TCE. The Tax Counseling for the Elderly 

(TCE) program offers free tax help for all 

taxpayers, particularly those who are 60 

years of age and older. TCE volunteers 

specialize in answering questions about 

pensions and retirement-related issues 

unique to seniors. Go to IRS.gov/TCE, 

CAUTION

!

download the free IRS2Go app, or call 

888-227-7669 for information on free tax 

return preparation.

• MilTax. Members of the U.S. Armed 

Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. Go to MilitaryOneSource.

Also, the IRS offers Free Fillable 

Forms, which can be completed online and 

then filed electronically regardless of income.

Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.

• The Earned Income Tax Credit Assistant 

(IRS.gov/EITCAssistant) determines if 

you’re eligible for the earned income credit 

(EIC).

• The Online EIN Application (IRS.gov/EIN) 

helps you get an employer identification 

number (EIN) at no cost.

• The Tax Withholding Estimator (IRS.gov/

W4app) makes it easier for everyone to 

pay the correct amount of tax during the 

year. The tool is a convenient, online way 

to check and tailor your withholding. It’s 

more user-friendly for taxpayers, including 

retirees and self-employed individuals. The 

features include the following.

▶ Easy to understand language.

▶ The ability to switch between 

screens, correct previous entries, and skip 

screens that don’t apply.

▶ Tips and links to help you determine 

if you qualify for tax credits and deductions.

▶ A progress tracker.

▶ A self-employment tax feature.

▶ Automatic calculation of taxable social security benefits.

• The First-Time Homebuyer Credit Account 

Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and 

account balance.

• The Sales Tax Deduction Calculator 

(IRS.gov/SalesTax) figures the amount you 

can claim if you itemize deductions on 

Schedule A (Form 1040).

Getting answers to your tax questions. On IRS.gov, you can get 

up-to-date information on current 

events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you 

get answers to some of the most common 

tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, 

a tool that will ask you questions and, 

based on your input, provides answers on 

a number of tax law topics.

• IRS.gov/Forms: Find forms, instructions, 

and publications. You will find details on 

2021 tax changes and hundreds of interactive links to help you find answers to your 

questions.

• You may also be able to access tax law information in your electronic filing software.

Need someone to prepare your tax return? 

There are various types of tax return preparers, 

including tax preparers, enrolled agents, certified public accountants (CPAs), attorneys, and 

many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer 

wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification number (PTIN).

Although the tax preparer always signs the 

return, you're ultimately responsible for providing all the information required for the preparer 

to accurately prepare your return. Anyone paid 

to prepare tax returns for others should have a 

thorough understanding of tax matters. For 

more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer 

on IRS.gov.

Advance child tax credit payments. From 

July through December 2021, advance payments were sent automatically to taxpayers with 

qualifying children who met certain criteria. The 

advance child tax credit payments were early 

payments of up to 50% of the estimated child 

tax credit that taxpayers may properly claim on 

their 2021 returns. Go to IRS.gov/advctc for 

more information about these payments and 

how they can affect your taxes.

Coronavirus. Go to IRS.gov/Coronavirus for 

links to information on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses, 

and tax-exempt organizations.

Employers can register to use Business 

Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/

employer for fast, free, and secure online W-2 

filing options to CPAs, accountants, enrolled 

agents, and individuals who process Form W-2, 

Wage and Tax Statement, and Form W-2c, 

Corrected Wage and Tax Statement.

Worksheet 3. Worksheet for NOL Carryover For 2021 to 2022 (For NOL Year 2021)

For Use by Individuals, Estates, and Trusts (Keep for you records.)

See the Worksheet 3 Instructions below..

Note. Use Worksheet 2 to figure your NOL carryover(s) for NOL years before 2018.

1. Enter the amount from Worksheet 1, line 24, if less than zero. Enter as a negative 

number. ........................................................................... 1.

2. Portion of line 1 above that is a loss that was carried back and used. Enter as a 

positive number ..................................................................... 2.

3. Enter the Excess business loss from Form 461, line 16. Enter as a negative number ............. 3.

4. Combine lines 1 through 3. This is your NOL to carry over to 2022 ............................ 4.

Publication 536 (2021) Page 9
IRS social media. Go to IRS.gov/SocialMedia 

to see the various social media tools the IRS 

uses to share the latest information on tax 

changes, scam alerts, initiatives, products, and 

services. At the IRS, privacy and security are 

our highest priority. We use these tools to share 

public information with you. Don’t post your social security number (SSN) or other confidential 

information on social media sites. Always protect your identity when using any social networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations for individuals, small businesses, 

and tax professionals.

Online tax information in other languages. 

You can find information on IRS.gov/

MyLanguage if English isn’t your native language.

Free over-the-phone interpreter (OPI) service. The IRS is committed to serving our multilingual customers by offering OPI services. OPI 

is a federally funded program and is available at 

Taxpayer Assistance Centers (TACs), other 

IRS offices, and every VITA/TCE return site. 

OPI service is accessible in more than 350 languages.

Accessibility Helpline available for taxpayers with disabilities. Taxpayers who need information about accessibility services can call 

833-690-0598. The Accessibility Helpline can 

answer questions related to current and future 

accessibility products and services available in 

alternative media formats (for example, braille, 

large print, audio, etc.).

Getting tax forms and publications. Go to 

IRS.gov/Forms to view, download, or print all of 

the forms, instructions, and publications you 

may need. Or, you can go to IRS.gov/

OrderForms to place an order.

Getting tax publications and instructions in 

eBook format. You can also download and 

view popular tax publications and instructions 

(including the Instructions for Form 1040) on 

mobile devices as eBooks at IRS.gov/eBooks.

Note. IRS eBooks have been tested using 

Apple's iBooks for iPad. Our eBooks haven’t 

been tested on other dedicated eBook readers, 

and eBook functionality may not operate as intended.

Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax 

account.

• View the amount you owe and a breakdown by tax year.

• See payment plan details or apply for a 

new payment plan.

• Make a payment or view 5 years of payment history and any pending or scheduled payments.

• Access your tax records, including key 

data from your most recent tax return, your 

economic impact payment amounts, and 

transcripts.

• View digital copies of select notices from 

the IRS.

• Approve or reject authorization requests 

from tax professionals.

• View your address on file or manage your 

communication preferences.

Tax Pro Account. This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS online 

account. For more information, go to IRS.gov/

TaxProAccount.

Using direct deposit. The fastest way to receive a tax refund is to file electronically and 

choose direct deposit, which securely and electronically transfers your refund directly into your 

financial account. Direct deposit also avoids the 

possibility that your check could be lost, stolen, 

or returned undeliverable to the IRS. Eight in 10 

taxpayers use direct deposit to receive their refunds. If you don’t have a bank account go to 

IRS.gov/DirectDeposit for more information on 

where to find a bank or credit union that can 

open an account online.

Getting a transcript of your return. The 

quickest way to get a copy of your tax transcript 

is to go to IRS.gov/Transcripts. Click on either 

“Get Transcript Online” or “Get Transcript by 

Mail” to order a free copy of your transcript. If 

you prefer, you can order your transcript by calling 800-908-9946.

Reporting and resolving your tax-related 

identity theft issues. 

• Tax-related identity theft happens when 

someone steals your personal information 

to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by email, text messages, telephone 

calls, or social media channels to request 

personal or financial information. This includes requests for personal identification 

numbers (PINs), passwords, or similar information for credit cards, banks, or other 

financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information 

on identity theft and data security protection for taxpayers, tax professionals, and 

businesses. If your SSN has been lost or 

stolen or you suspect you’re a victim of 

tax-related identity theft, you can learn 

what steps you should take.

• Get an Identity Protection PIN (IP PIN). IP 

PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their 

SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return 

with your SSN. To learn more, go to 

IRS.gov/IPPIN.

Ways to check on the status of your refund. 

• Go to IRS.gov/Refunds.

• Download the official IRS2Go app to your 

mobile device to check your refund status.

• Call the automated refund hotline at 

800-829-1954.

Note. The IRS can’t issue refunds before 

mid-February 2022 for returns that claimed the 

EIC or the child tax credit (ACTC). This applies 

to the entire refund, not just the portion associated with these credits.

Making a tax payment. Go to IRS.gov/

Payments for information on how to make a 

payment using any of the following options.

• IRS Direct Pay: Pay your individual tax bill 

or estimated tax payment directly from 

your checking or savings account at no 

cost to you.

• Debit or Credit Card: Choose an approved 

payment processor to pay online or by 

phone.

• Electronic Funds Withdrawal: Schedule a 

payment when filing your federal taxes using tax return preparation software or 

through a tax professional.

• Electronic Federal Tax Payment System: 

Best option for businesses. Enrollment is 

required.

• Check or Money Order: Mail your payment 

to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes 

with cash at a participating retail store.

• Same-Day Wire: You may be able to do 

same-day wire from your financial institution. Contact your financial institution for 

availability, cost, and time frames.

Note. The IRS uses the latest encryption 

technology to ensure that the electronic payments you make online, by phone, or from a 

mobile device using the IRS2Go app are safe 

and secure. Paying electronically is quick, easy, 

and faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/

Payments for more information about your options.

• Apply for an online payment agreement 

(IRS.gov/OPA) to meet your tax obligation 

in monthly installments if you can’t pay 

your taxes in full today. Once you complete 

the online process, you will receive immediate notification of whether your agreement has been approved.

• Use the Offer in Compromise Pre-Qualifier 

to see if you can settle your tax debt for 

less than the full amount you owe. For 

more information on the Offer in Compromise program, go to IRS.gov/OIC.

Filing an amended return. You can now file 

Form 1040-X electronically with tax filing software to amend 2019 or 2020 Forms 1040 and 

1040-SR. To do so, you must have e-filed your 

original 2019 or 2020 return. Amended returns 

for all prior years must be mailed. Go to 

IRS.gov/Form1040X for information and updates.

Checking the status of your amended return. Go to IRS.gov/WMAR to track the status 

of Form 1040-X amended returns.

Note. It can take up to 3 weeks from the 

date you filed your amended return for it to 

show up in our system, and processing it can 

take up to 16 weeks.

Understanding an IRS notice or letter 

you’ve received. Go to IRS.gov/Notices to 

find additional information about responding to 

an IRS notice or letter.

Page 10 Publication 536 (2021)
You can use Schedule LEP, Request for 

Change in Language Preference, to state a 

preference to receive notices, letters, or other 

written communications from the IRS in an alternative language, when these are available. 

Once your Schedule LEP is processed, the IRS 

will determine your translation needs and provide you translations when available. If you 

have a disability requiring notices in an accessible format, see Form 9000.

Contacting your local IRS office. Keep in 

mind, many questions can be answered on 

IRS.gov without visiting an IRS Taxpayer Assistance Center (TAC). Go to IRS.gov/LetUsHelp 

for the topics people ask about most. If you still 

need help, IRS TACs provide tax help when a 

tax issue can’t be handled online or by phone. 

All TACs now provide service by appointment, 

so you’ll know in advance that you can get the 

service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find 

the nearest TAC and to check hours, available 

services, and appointment options. Or, on the 

IRS2Go app, under the Stay Connected tab, 

choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate 

Service (TAS) Is Here To 

Help You

What Is TAS?

TAS is an independent organization within the 

IRS that helps taxpayers and protects taxpayer 

rights. Their job is to ensure that every taxpayer 

is treated fairly and that you know and understand your rights under the Taxpayer Bill of 

Rights.

How Can You Learn About Your 

Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic 

rights that all taxpayers have when dealing with 

the IRS. Go to TaxpayerAdvocate.IRS.gov to 

help you understand what these rights mean to 

you and how they apply. These are your rights. 

Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you 

can’t resolve with the IRS. And their service is 

free. If you qualify for their assistance, you will 

be assigned to one advocate who will work with 

you throughout the process and will do everything possible to resolve your issue. TAS can 

help you if:

• Your problem is causing financial difficulty 

for you, your family, or your business;

• You face (or your business is facing) an 

immediate threat of adverse action; or

• You’ve tried repeatedly to contact the IRS 

but no one has responded, or the IRS 

hasn’t responded by the date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of 

Columbia, and Puerto Rico. Your local advocate’s number is in your local directory and at 

TaxpayerAdvocate.IRS.gov/Contact-Us. You 

can also call them at 877-777-4778.

How Else Does TAS Help 

Taxpayers?

TAS works to resolve large-scale problems that 

affect many taxpayers. If you know of one of 

these broad issues, report it to them at IRS.gov/

SAMS.

TAS for Tax Professionals

TAS can provide a variety of information for tax 

professionals, including tax law updates and 

guidance, TAS programs, and ways to let TAS 

know about systemic problems you’ve seen in 

your practice.

Low Income Taxpayer 

Clinics (LITCs)

LITCs are independent from the IRS. LITCs 

represent individuals whose income is below a 

certain level and need to resolve tax problems 

with the IRS, such as audits, appeals, and tax 

collection disputes. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 

Services are offered for free or a small fee for 

eligible taxpayers. To find an LITC near you, go 

to TaxpayerAdvocate.IRS.gov/about/-us/LowIncome-Taxpayer-Clinics-LITC/ or see IRS Pub. 

4134, Low Income Taxpayer Clinic List.

Publication 536 (2021) Page 11
To help us develop a more useful index, please let us know if you have ideas for index entries.

See “Comments and Suggestions” in the “Introduction” for the ways you can reach us. Index

A

Assistance (See Tax help)

C

Carryback, waiving 5

Carryback period 3

Carryforward period 3

Carryover from 2018 to 2019:

Estates and trusts 7

Claiming an NOL deduction 5

D

Deducting a carryback 5

Deducting a carryforward 6

Domestic production activities 

deduction 7

E

Excess business loss 7

F

Figuring an NOL:

Capital losses 3

Carryover 7

NOLs from other years 3

Nonbusiness deductions 3

Nonbusiness income 3

Worksheet 1. Figuring Your 

NOL 3

Filing status, change in 6

Form 1045, Schedule B 7

Forms and schedules:

Form 1040X 5

Form 1045 5

Form 1045, Schedule B 7

Future developments 1

H

How to carry an NOL back or 

forward 5

How to figure an NOL 2

M

Marital status, change in 6

Missing children, photographs 

of 2

Modified taxable income 7

N

NOL Before 2018, Carryover to 

2020:

Worksheet 2 instructions 7

NOL in 2019, Carryover to 2020:

Worksheet 3 Instructions 8

NOL year 2, 3

P

Publications (See Tax help)

R

Refiguring tax 6

Reminder 2

S

Steps in figuring NOL 2

T

Tax help 9

W

Waiving the carryback period 5

What’s New 1

When to use an NOL 3

Worksheet 2:

Carryover from 2021 to 2022 for 

NOL Year Before 2018 8

Page 12 Publication 536 (2021)